27 June 2012 Last updated at 00:58 By Rajini Vaidyanathan BBC News, Mumbai

At his factory in the outskirts of Mumbai, Nitin Bondal is staring proudly at a large machine. The 4m (13ft) orange structure has a futuristic air, as it stands, pride of place, in the corner of a dusty, decades-old workshop, filled with the stench of factory fumes.

Two men climb up to the top, and start pouring bags of broken plastic down a chute.

When Mr Bondal presses a button, the machine whirrs to life, and in about an hour, a form of petrol starts to drip into a bottle at the other end.

"This is our prototype machine, it turns all types of waste into crude oil," he says proudly.

"We put all kinds of things in here, everything from plastic to electronic waste to old tyres."

Mr Bondal says this technology has the capability to convert 150 tonnes of waste into 150,000 litres of crude oil, every day, once fully operational.

"It works on what we call the polycrack system," says Mr Bondal. "We are cooking the material and converting it into gas. When you heat any matter there is hydrogen and carbon available," he adds.

As Mr Bondal explains, this gas is then passed through a "special catalyst", which breaks the molecules down to form hydrocarbon gas and petroleum gas, which when cooled becomes liquid petroleum fuel.

Mr Bondal and his business partner, Raghuvendra Rao - who both have a background in the oil industry and spent five years developing their company, Sustainable Technologies & Environmental Projects (Steps) - hope to start selling the oil later this year.

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India's bet on eco-friendly tech